US Dollar Index Forecast December 12, 2012, Technical Analysis

The US Dollar Index fell most of the session on Tuesday in order to close right amount the 80 handle. The shooting star from Monday of course signaled that we could’ve gotten some weakness in this session, and that’s exactly what happened. Now that we set the 80 handle, I firmly believe that this market is simply waiting to see what the Federal Reserve will do later today with the question and answers portion of the announcement, as well as the announcement itself.

Any signs of quantitative easing will send this market much lower, perhaps challenging the 79 handle. However, if the Federal Reserve does not look ready to ease any further or continue asset purchases, it’s very likely that this market would attempt to go back towards the 81 handle.